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U.K.-based HSBC, which has been under pressure to boost returns, said it is negotiating with an unnamed potential buyer for its 15.6% stake in
Ping An Insurance
(Group) Co. of China. The stake in Ping An, which is listed in Hong Kong and Shanghai, has a current market value of $9.28 billion.

HSBC, the single biggest shareholder in Ping An, said in a statement Monday that it has "from time to time received approaches regarding its shareholding and confirms that it is in discussions which may or may not lead to the sale of the shares." HSBC said it will make further announcements "if or when appropriate."

Ping An said in a statement late Monday that it was aware of the HSBC announcement and that it will "pay close attention to the progress" of the matter. Ping An added that it is financially stable in terms of capital and solvency adequacy, noting that its businesses such as insurance, banking and investments are operating well.

The talks were reported by the Chinese-language Hong Kong Economic Journal, which cited unnamed people saying that Charoen Pokphand Group, backed by Thai billionaire Dhanin Chearavanont, may be one of the parties interested in buying the stake. One of Thailand's richest men, Mr. Dhanin made his fortune from agribusinesses. The company and executives didn't respond to requests for comment.

Ping An's shares declined 1.9% in Hong Kong trading Monday, but they are up 14% this year.

The market value of HSBC's stake in Shenzhen-based Ping An is nearly six times the price the bank paid for the investment. HSBC first bought a 10% stake in Ping An in 2002 for $600 million, two years before the insurer's Hong Kong listing. It bought an additional 9.91% stake in 2005 for $1.04 billion. Its stake was diluted following a 2011 share placement.

HSBC has been marking up the value of its Ping An stake over the years, however. According to
Goldman Sachs Group
,
based on the Nov. 16 closing price, a sale of HSBC's stake in Ping An would have generated a $2.8 billion pretax gain for the U.K. bank.

Talks on a sale come as HSBC is focusing on core businesses and also as pending global regulatory requirements make holding stakes in financial institutions especially onerous from a capital standpoint. In recent months, other Western banks like
Citigroup
Inc.
have been disposing of minority stakes in banks in Asia. HSBC earlier this year sold its general insurance businesses in Hong Kong, Singapore, Argentina and Mexico to
AXA Group
and Australia's
QBE Insurance Group
Ltd.
in separate deals.

For its part, Ping An has been less profitable for HSBC this year than last year. The insurer contributed a pretax profit of $447 million for HSBC in the first half of the year, down from $469 million in the same period last year as underwriting income fell, HSBC said, without elaborating.

Under new bank regulations known as Basel III, lenders are required to keep higher capital buffers to absorb potential financial stress, while banks with investments in financial institutions also need to set aside additional capital. If HSBC sells its Ping An stake, its core Tier 1 capital ratio—a key measure of a bank's financial strength—could rise by 0.17 percentage point, according to Goldman Sachs. As of September, HSBC's core Tier 1 ratio was 11.7%. Under Basel III, banks must reach a minimum core Tier 1 capital ratio of 7% by 2018.

Despite the sale talks, China is an increasingly profitable market for HSBC. It began expanding aggressively in China after it was cleared by Beijing to offer customers yuan-denominated services in 2005.

The 2011 profit at HSBC's Chinese unit rose to almost four times the previous year's level, at 3.42 billion yuan ($548 million), dwarfing that of the next most profitable non-mainland bank, Hong Kong-based
Bank of East Asia
Ltd.
, which earned 1.31 billion yuan at its mainland unit, according to a KPMG survey.

HSBC currently has over 130 branches in China, more than any other foreign bank in the country, as well as a small network of rural banks.

Still, despite HSBC's success relative to its foreign peers, the bank remains a minnow compared with China's major banks, many of which have thousands of branches throughout the country. According to KPMG, foreign banks account for only 2% of total assets in China's banking system.

Apart from Ping An, China's second-largest life insurer by premiums after
China Life Insurance
Co.
, HSBC has its own life-insurance operation in China, a joint venture with Beijing-based asset-management company National Trust Ltd. The venture, launched in mid-2009, collected 297 billion yuan in premiums in 2011, up 151% from the year before, according to the company.

HSBC is moving to get rid of noncore businesses as part of a wider strategy to slim down and increase its profitability. The strategy, unveiled last year under Chief Executive
Stuart Gulliver
,
includes about 30,000 job cuts, a retreat in some countries from retail banking or small operations, and an effort to attract more wealthy customers.

—Dinny McMahon in Beijing and Phisanu Phromchanya in Bangkok contributed to this article.

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